Federal Reserve and Bank of Japan Hold Rates Steady Amid Economic Uncertainty

Both central banks maintain caution as U.S. tariffs and inflation pressures shape their monetary policy outlooks.

The Federal Reserve is expected to hold its key interest rate at 4.25%-4.5% during its March meeting, with projections of two to three rate cuts later in 2025.
The Bank of Japan has kept its interest rate at 0.5%, citing concerns over U.S. trade policies and their impact on Japan's export-driven economy.
U.S. inflation remains elevated at 2.8% in February, above the Federal Reserve's 2% target, complicating its monetary policy decisions.
Both central banks are grappling with uncertainties caused by President Donald Trump's unpredictable tariff policies, which have disrupted global trade and financial markets.
The Federal Reserve is set to release updated economic projections, including forecasts for inflation, GDP, and unemployment, following its March meeting.